20 Sep 2010
The property industry has welcomed the launch of radical new borrowing powers aimed at funding local investment and economic growth.
The powers, announced by deputy prime minister Nick Clegg at the Liberal Democrat Autumn conference in Liverpool today, will pave the way for councils to use Tax Increment Financing (TIF) – a method of forwarding funding infrastructure seen as vital to unlocking new development.
Today’s announcement came after more than three years of lobbying, led by industry groups including the British Property Federation (BPF).
TIF funding allows local authorities to borrow against the predicted growth in their locally raised business rates. They can use that borrowing to fund key infrastructure and other capital projects, which will support locally driven economic development.
More information on how TIF will operate will be set out alongside next month’s Spending Review.
BPF chief executive Liz Peace said: “We are delighted that government has taken such a far-sighted step to ensure that new infrastructure - which will be vital to rebuild the UK economy - can be delivered, even at a time when public funding is scarce.
“Ministers should be congratulated for offering industry what would appear to be absolutely brilliant news, although obviously the devil will be in the detail.
“A huge amount of work and expertise has gone into lobbying for TIFs, over a campaign lasting many years. We look forward to working further with government to ensure that the emerging TIF regime is workable and effective.”